Research Progress Report 92
February, 1964
Construction and Application of Weather Indexes with Comparisons to Actual Yield Data
James S. Wehrly, Agricultural Economics
The adage, "Everyone talks about the weather but no one does anything about it, " is as applicable to agricultural economists as it is to many others who are concerned with weather effects. While all in our profession recognize that the variable incomes resulting, in part, from weather variations are a problem for farmers, much of our economic analysis has proceeded along static lines, as though every year will be an "average" year. To a certain extent we can excuse reluctance to depart from this "average" concept because of the difficulty of translating measurements of factors contributing to variability into terms that can be used in our economic models. The development of methods for including measures of variability in economic models could contribute substantially toward analysis of income instability problems.
Recent literature contains a number of
approaches to the variability measurement problem. One approach to the measurement of factors associated with variability is the "Weather Indexes" constructed by Stallings. 1/ Working with experimental plot data, Stallings computed the weather index as the ratio of the actual yield to the yield estimated from a trend regression equation. By combining data from several sources, and weighting individual indexes, he was able to construct several series of weather indexes covering the period 1900-1957.
Greve, Plaxico, and Lagrone published work related to management strategies in the high-risk areas of Oklahoma in which they compare the variability of production, price, gross income, and income above specified costs for selected farm enterprises. 2/
The Oklahoma yield data showed no evidence of an increasing yield, trend which is so obvious in data series for many other parts of the
1/ Stallings, James L., "Weather Indexes, " Journal of Farm Economics, Vol. 42,No. 1, February 1960, and "A Measure of the Influence of Weather on Crop Production, " same journal, Vol.43,5, December 1961.
2/ Greve, Robert W., James S. Plaxico, and William F. Lagrone, Production and Income Variability of Alternative Farm Enterprise in Northwest Oklahoma, Oklahoma State University Experiment Station, Bulletin B-563, August i960.
PURDUE UNIVERSITY • Agricultural Experiment Station • Lafayette, Indiana